In Brief – N.25 – November 25, 2015

Less than 6 months after losing its hold on Turkey’s parliament, the country’s ruling Justice and Development Party (AKP) led by President Recep Tayyip Erdoganregained a decisive majority in a dramatic snap election.

A Russian Metrojet jetliner Airbus A321 crashed in Sinai Peninsula, Egypt killing the 224 people aboard. ISIS claimed responsibility for it, saying it broke the aircraft up at high altitude.

Chinarolled its first homegrown large passenger jet – C919 – off the Comac production line in Shanghai, vowing to challenge the dominance of Airbus A320 and Boeing B737 in the global commercial aviation market.

China’s presidentsignaled policy makers will accept slower growth, but not much slower – no less than 6.5% – as details of a blueprint set to define Xi Jinping’s term as leader were released.

General Electric (GE) has completed the acquisition of Alstom’s power and grid businesses for €12.35 billion. GE is targeting $3 billion in cost synergies in year five and strong deal returns.

Areva and its Chinese partner China National Nuclear Corporation (CNNC) signed in Beijing a memorandum of understanding for a possible partnership that includes capitalistic and industrial components.

Visa Inc. and Visa Europe Ltd.announced a definitive agreement for Visa Inc. to acquire Visa Europe, creating a single global company. The transaction consists of upfront consideration of €16.5 billion.

Standard & Poor’s (S&P) Ratings Services cut its credit rating on Saudi Arabia from AA- to A+, saying the tumble in oil prices is driving a wider government deficit.

“There can only be a single money if there is a single banking system. Deposits must inspire the same level of confidence wherever they are located,” saidECB President Mario Draghi.

German Economy Minister Sigmar Gabrieltold a BDI industry association event that he expects growth of 1.7% to 1.8% in Europe’s biggest economy this year (2015) and next (2016).

The scheduled meeting in Singapore between Chinese President Xi Jinping and Taiwanese leader Ma Ying-jeou across the Taiwan Strait is “significant” and bores “positive meaning” for long-term development of cross-Strait relations, Chinese official said.

The economy is “performing well,” Janet Yellen, the Fed chair, told the House Financial Services Committee, adding that “it could be appropriate” to raise rates at the Fed’s final policy meeting of the year in mid-December 2015.

“Before the end of the year, the Commission will table a proposal for a European Deposit Insurance Scheme,” EU Commissioner Jonathan Hilltold a ECB conference on financial supervision. “This new proposal will (…) be based initially on a reinsurance approach and will build on Member States’ existing schemes.”

This US earnings season (Q3 2015) is on track to be the worst since 2009 as profits from oil and gas and commodity-related companies plummet, wroteBloomberg Business.

The economic recovery should continue at a modest pace next year (2016) despite more challenging conditions in the global economy according to the 2015 Autumn Economic Forecast of the European Commission.

China’s economic slowdown is likely to have only a modest impact on euro area GDP as the country accounts for a relatively small share of euro area exports, said the ECB Economic Bulletin.

Boeing and Tata Advanced Systemsannounced a joint venture (JV) that will manufacture aerostructures for aircraft and collaborate on integrated systems development opportunities in India.

“Rather than being a commodity in decline, as some would like to portray, supply and demand patterns indicate that the long-term fundamentals of the oil complex remain robust,” said Saudi Arabia’s vice oil minister Prince Abdulaziz bin Salman.

The IEAfound that the plunge in oil prices has set in motion the forces that lead the market to rebalance, via higher demand and lower growth in supply, although the adjustment mechanism in oil markets is rarely a smooth one. A tightening oil balance could lead to a price around $80 per barrel by 2020.

General Electric (GE) will invest $200 million to develop and supply Indian Railways with 1,000 diesel locomotives. The supply and maintenance contract is worth approximately $2.6 billion over 11 years. “This infrastructure project is further evidence of India’s position as a growth engine for Asia,” said CEO Jeff Immelt.

Morocco King Mohammed VIreiterated that there could be no compromise on Morocco’s claim to sovereignty over disputed Western Sahara where he paid a rare visit and announced a €7.2 billion development plan for the region.

Apple is reportedly slashingiPhone 6s orders by 10%, as the demand for the best iPhone yet is weaker than expected. However, the iPhone isn’t in trouble, Credit Suisse analysts said, when it comes to Apple’s long-term plans.

The influx of refugees into Europe and the possibility of Brexit are threatening economic integration in the continent, the IMF warns. “I worry a lot about the strong trend in Europe to pull back from market integration,” Maurice Obstfeld, the IMF’s new chief economist, toldAFP.

“We had a problem in 2008 because of high debt, but since then debt worldwide has gone through the roof. I mean nobody has reduced their debt, no nation has reduced its debt since 2008, the debt has gotten higher and higher,” warned international investor Jim Rogers who sees a bear market ahead.

“In Europe, national policymakers cannot fully protect citizens without pooling more sovereignty. (…) For countries sharing a single market and a single currency, it’s important to complete economic and monetary union in all its aspects,” saidECB President Mario Draghi.

Airbnb apartment rental website said it has contributed to an economic impact of €2.5 billion YOY in France, its second largest market after the United States. Except that if one takes into account unpaid taxes and less customer for the hotel industry, this figure is unsure.

“First and foremost, it is necessary (on behalf of the G20) to continue improving the international monetary and financial system,” said Russian President Vladimir Putin who thinks “global economy is still unstable.”